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Debt Consolidation

Personal Loan vs. Balance Transfer: Which Saves You More in the Long Run?

Written by Lauren Hamer, CFEI®
Senior Content Writer
February 12, 2026 | 9 min read
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Many high earners reach a point where their financial responsibilities start to pull in different directions—multiple credit cards, large recurring expenses, or a single unexpected bill that pushes balances higher than intended. You already know restructuring your debt using a balance transfer or personal loan could help, but which path creates the most value?

Both tools can help you organize high-interest credit card debt. But the right choice depends on how quickly you want to pay it off, how much liquidity you want to preserve each month, and what kind of long-term structure you prefer. Understanding these differences is the key to finding the most meaningful financial progress—not just today, but for the years ahead.

 

Key TAKEAWAY

If you’re comparing debt consolidation options for high earners, a balance transfer may offer short-term savings, but a fixed-rate personal loan can deliver the long-term financial stability, lower monthly payments, and liquidity professionals rely on. The best way to consolidate credit card debt depends on your timeline, cash flow needs, and the size of your balances.

Why high earners consider consolidation—even with strong credit

Debt consolidation is more than just an option for those struggling financially. For six-figure professionals, it’s often a strategic decision to simplify repayment, reduce interest, and improve cash flow.

 

Liquidity trumps lifestyle

Even high-income earners experience periods where cash flow feels tight. Multiple credit cards, tuition, home projects, and everyday spending can spread balances across several accounts. Consolidation converts those balances into one predictable monthly payment, giving you room to plan ahead, invest intentionally, or build reserves without the pressure of high-rate variable debt.

 

A proactive move—not financial rescue

Consolidation is often framed as something people do as a last resort. In reality, it’s one of the smartest financial decisions for high earners who want clarity and control. By converting high-rate revolving debt into an installment plan, you remove the uncertainty of fluctuating interest rates and growing balances. It’s a way to streamline your financial life, not a sign that anything has gone wrong.

Option 1: Balance transfer credit cards

Balance transfer cards are popular because they offer a temporary 0% APR period—typically six to 21 months—allowing disciplined borrowers to make progress quickly.

 

How they work

A balance transfer allows you to move an existing credit card balance to a new card with a promotional 0% APR period. You’ll pay a transfer fee to move the balance—usually 3% to 5% of the amount transferred. After the promotion ends, the APR reverts to the card’s standard rate, which averaged around 21% in 2025 according to the Federal Reserve.

 

Pros

  • Attractive 0% intro APR: You’ll pay no interest during the promotional period, leading to immediate savings
  • Full principal repayment window: Because interest is paused, your payments go directly toward reducing your balance for a limited time.
  • Revolving credit flexibility: Balance transfers do not have a fixed structure, which may be beneficial if your income varies month to month.

 

Cons

  • Short-term solution: Once the 0% window ends, rates often jump above 20%.
  • High fees and transfer limits: A 3% transfer fee on $30,000 adds $900 to your debt. And many cards cap transfers of around $15,000.
  • No long-term cash flow support: High monthly payments are usually required to tackle your full balance before the promo period ends, which could compromise liquidity.
  • Risk of new debt: Your original card stays open, which may encourage more spending if you’re not careful.

 

When it works best

A balance transfer is most effective when your credit card debts are smaller (typically $10,000 to $15,000), you can comfortably pay them off within 12 to 18 months, and you want temporary interest relief. If you can commit to an aggressive payoff schedule, a balance transfer can be a cost-effective solution to rapidly eliminate debt.

 

Read more: Credit Card Refinancing: How to Lower Your Interest and Pay Off Debt Faster

Option 2: Fixed-rate personal loan for debt consolidation

A personal loan offers structure, predictability, and a clear repayment path—especially valuable for high earners managing larger or multiple balances.

 

How it works

A personal loan gives you a lump sum of money to pay off your high-interest credit card balances in full. You’ll repay the amount you borrowed in installments, with a fixed rate and set loan term. This simplifies your finances and protects your budget from fluctuating credit card APRs.

 

Pros

  • Predictable monthly payments: Fixed rates and set terms mean you always know what to expect. There’s one due date, one payoff timeline, and no guesswork.
  • Longer terms for more control: Most lenders offer three- to seven-year terms, but BHG provides industry-leading extended terms up to 10 years.1,2 This helps lower your required monthly payments. 
  • Potential interest savings: Installment loans tend to have lower APRs than credit cards. This could save you significant interest, especially if your current APRs exceed 20%, which is common among U.S. credit cards today.
  • Improved credit utilization: Paying off revolving balances can boost your score by lowering utilization ratios.
  • Can pay off multiple types of debt: The lump sum can be used to tackle a mix of unsecured debts, including credit cards or other personal loans.

 

Cons

  • Origination fees may apply: Though often lower than balance transfer fees for larger balances, some lenders charge origination fees. These typically range from 1% to 8% of the loan amount.
  • Fixed terms: Personal loans require you to commit to a structured repayment plan, which may be limiting if your income is highly variable.
  • Longer terms can increase total cost: While longer-term personal loans are ideal if you need more time to repay what you owe, they also increase the total interest paid over the life of the loan.

 

When it works best

A fixed-rate personal loan is ideal when you have $25,000 to $100,000+ in unsecured balances, and you want a more predictable payoff timeline. BHG offers unsecured loans up to $250,000,1 making this an attractive option for prime credit borrowers with large or complex financial obligations. If you want long-term stability and consistent cash flow, this solution gives you valuable structure and clarity.

Let’s compare: Which saves you more over time? 

Let’s walk through a real-world scenario using the same $30,000 balance.

Balance transfer option: $30,000 balance, 0% intro APR for 18 months, 3% transfer fee

  • Required payment to finish in 18 months: $1,716 per month
  • Cost for funding: $900
  • Total cost: $30,900

 

BHG personal loan option: $30,000 with a 12% APR and a 60-month (5-year) term

  • Monthly payment: $667
  • Total interest over 5 years: $10,040
  • Total cost: $40,040, but you free up over $1,000 per month in liquidity

 

The takeaway:

If you can aggressively pay off the balance within 12 to 18 months, a balance transfer may save money. But if you want to protect your cash flow or need more flexibility in repayment, a personal loan becomes the more strategic choice, especially if you secure a competitive rate.

This is why many high earners and prime credit borrowers choose personal loans for consolidating multiple types of unsecured debt at once. They provide the structure and flexibility professionals need to balance career demands, family priorities, and financial goals.

See your offer † real fast

Just a few easy steps to get prequalified!

 
† This is not a guaranteed offer of credit and is subject to credit approval.

Why high-income professionals choose BHG’s personal loan 

Many borrowers explore “DIY consolidation”—attempting to manage balances manually, shifting payments between cards, or timing payments around income cycles. These approaches may work for smaller balances, but they often become difficult to sustain as obligations grow. A personal loan offers a clear, contained solution that puts busy professionals back in control.

BHG Financial works with successful people who want to simplify their debt, protect liquidity, and stop overpaying on high-rate credit cards.

 

High loan amounts, longer terms

Most lenders cap consolidation loans at $40,000 to $100,000. BHG provides unsecured personal loans up to $250,0001, allowing high earners to consolidate multiple cards—and even existing loans—into one streamlined solution. Repayment terms up to 10 years1,2 help lower required monthly payments and create long-term stability.

 

Built for strong borrowers

Your financial life is more complex than a single credit score. Unlike credit card applications, which grant approval based on a single criterion, BHG casts a wider net to offer financing options. Our personal loan application evaluates your full financial profile—including income potential, credit history, and professional background—to provide personalized options designed for high earners.

 

Private, fast, and credit-safe

You can prequalify in minutes with no impact on your credit score,3 receive personalized loan options, and, if approved, get funding in as few as five days.4 BHG’s lending process is both secure and customized to ensure you get discreet service tailored to your needs.

A dedicated U.S.-based loan specialist guides you through every step, so you never have to navigate the process alone.

Key questions to decide what’s right for you 

 

Can you comfortably pay off the debt in 12 to 18 months?

If the answer is yes—and your balance is under $15,000—a balance transfer may be the most efficient tool. But if high payments would strain your budget, a personal loan helps you spread repayment over time while preserving cash flow.

 

Is your goal long-term flexibility rather than just a short-term rate?

Balance transfers are built for speed. Personal loans are built for stability. If you value predictable payments and a clear payoff date, a personal loan delivers structure that aligns with long-term financial planning.

 

Are you managing multiple high-interest debts?

If you’re juggling three, four, or five cards with APRs above 20%, consolidation with a personal loan can reduce interest, simplify your financial life, and restore control.

 

Read more: Managing Debt in Your 30s and 40s: What High Earners Need to Know About Loan Refinancing

Final thought: The right move isn’t always the shortest one 

Balance transfers can offer short-term relief, but personal loans provide a structured, long-term path that helps high earners stay in control—financially and mentally. The most powerful solution is the one that supports your broader goals, protects your cash flow, and brings clarity to your financial plan.

Want to compare your options? Prequalify for a BHG personal loan in minutes4—no credit impact,3 just insights.

Check my rate

See your offer † real fast

Just a few easy steps to get prequalified!

 
† This is not a guaranteed offer of credit and is subject to credit approval.

Not all solutions, loan amounts, rates or terms are available in all states.

1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

2 There is no impact on your credit for applying. For personal loans, a complete credit history, which will appear as an inquiry on your credit report, will be performed upon acceptance and funding of the loan and may impact your credit.

3 This is not a guaranteed offer of credit and is subject to credit approval. 

Consumer loans funded by Pinnacle Bank, a Tennessee bank, or County Bank. Equal Housing Lenders. 

No application fees, commitment, or impact on personal credit to estimate your payment.

For California Residents: BHG Financial loans made or arranged pursuant to California Financing Law license - Number 603G493.

 

 

 

If you’re feeling weighed down by credit card debt, you’re not alone. High interest rates can feel like an uphill battle, making it easy to fall behind and tough to catch up. 

Understanding how to pay off credit card debt is the first step toward taking control of your debt and reclaiming your financial well-being. Here are a few practical strategies to eliminate credit card debt.

 

Key considerations

  • If you have a significant amount of high-interest debt and a good credit score, a debt consolidation loan can be a viable option for paying off credit card debt. For smaller debts, a balance transfer card could help you tackle debt faster.
  • If not consolidating or using a balance transfer card, set a goal and a budget for repayment; targeting one debt at a time using the snowball or avalanche method can help reduce your balances methodically.
  • Gradually exceed monthly minimum payments whenever possible to decrease your total interest over time. Even small extra payments can make a big difference in your credit card debt over the long term.

 

Why is credit card debt hard to pay off?

U.S. credit card balances have surpassed $1.21 trillion, according to the Federal Reserve, driven partially by high APRs.

Credit card debt is difficult to overcome. Even if you don’t make additional purchases, the interest compounds. Only paying the minimum each month means you will carry the debt from month to month, increasing your debt as you accumulate interest charges.

For example, if you’ve amassed $50,000 in credit card debt on a card with a 23% APR, you could pay up to $11,500 per year in interest. Without a plan in place to address the debt proactively, it can become a significant burden. 

To start, pay as much as you can toward the debt. Some common ways to do this effectively and consistently include using the debt snowball or debt avalanche method. 

 

What is the debt snowball method?

If you have balances on multiple cards, one of the best strategies to eliminate credit card debt is the snowball method. With the debt snowball method, you pay off the card with the smallest balance first before moving on to the next largest one.

This method is a good choice if you can’t afford to make large monthly payments but want to proactively chip away at your debt. Once you pay off a card, you'll redirect the funds you were using for that payment to your next card balance. You'll continue to do this until you’ve tackled each debt.

Here’s how it looks in action, using the following credit card balances as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the snowball method, you’d focus on the second card on this list first because it has the lowest balance ($2,000). Once cleared, you’d move on to the next highest card balance ($5,500) before addressing the third card with a $10,000 balance. 

Remember to make minimum payments on all other cards in the meantime; missing any minimum payment can hurt your credit score.

 

What is the debt avalanche method?

Attacking debt using the debt avalanche method involves paying off the account with the highest interest rate first, regardless of the balance. It can take a while to make progress on —especially if the balance on that card is excessive—but you’ll save money on interest in the long run. 

The avalanche method may be a better strategy for you if you can confidently afford a bigger payment and want to pay less in interest while you work to become debt-free. 

Here’s how debt avalanche looks in action, using the same credit card balances from above as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the avalanche method, you’d tackle the third card first because it has the highest APR (23%). You’d focus on the second card next—APR of 20%—even though it has a lower balance, before moving on to the first card with the lowest APR. 

Again, it’s important to focus on making every payment on time to protect your credit score and avoid tacking on additional late fees. It can take a while to knock out the first debt, so patience and consistency is key.

 

How can debt consolidation help? 

Consolidating personal credit card debt FAQs

Consolidating personal credit card debt can simplify your finances by combining multiple debts into a single monthly payment with more manageable interest rates. In the long run, this can save you from spending more money than you anticipated or previously agreed to on in-terest payments in the future.

Personal debt consolidation can impact your credit score differently depending on the method chosen. For example, applying for a new loan or credit card for consolidation may result in a temporary dip in your credit score due to inquiries, changes in credit utilization, and your his-tory using credit-based financial products. However, making timely payments on the consoli-dated debt can positively affect your credit score by demonstrating responsible financial man-agement.**

Yes, personal debt consolidation can be applied to various types of debt, including personal loans, medical bills, and student loans, in addition to credit card debt. Consolidating multiple debts into a single payment can streamline your repayment process and make it easier to man-age your finances overall.

With highly specialized financing options for accomplished professionals, BHG Financial offers personal loans up to $200K1 to use as you need them. With repayment terms that last up to 10 years,1,2 you can fully bring your financial plan to action by consolidating your personal debts into a simple and affordable monthly payment to help you achieve financial peace of mind sooner rather than later.

Our payment estimator can help you see your personalized estimate quickly, and our dedicated concierge service team can serve your needs every step of the way.

 

Debt consolidation involves combining multiple credit card debts into one new account or loan and using it to pay off your existing debts. In many cases, consolidation can save you money because the new product may come with a lower interest rate than the ones attached to your cards. Consolidating debt also simplifies the repayment process because you only need to manage one monthly payment.

Some of the most effective credit card consolidation strategies include using a debt consolidation loan or a balance transfer credit card. The best way to pay off credit card debt will depend on the amount of debt you have, your credit history, and your income level.

If you have a significant amount of high-interest debt and a respectable credit score, a lower-rate personal loan for debt consolidation can be a viable option. Debt consolidation loans, like the ones offered by BHG Financial, have flexible repayment terms1 that help keep your monthly payments low.

 

Do balance transfers help pay off debt faster?

Transferring your balance from one credit card to another can help you pay your debt faster, as long as the new card comes with a lower rate. If you transfer your balances to a new card with a lower APR, you can allocate a greater portion of your future payments to paying down the principal instead of the interest.

That said, there are a few things to know about the timing of balance transfer credit cards:

  • You can apply for a balance transfer card in a matter of minutes, but the actual transfer can take anywhere from a few days to several weeks, depending on the credit card company. During that time, you’ll still have to make any payments you owe to your original card company.
  • Make sure you understand how long the introductory rate lasts, whether there’s a transfer fee, and what the regular rate will be after the promotional period. Introductory rates typically run for a period of six to 18 months, and if you can’t pay off your balance in full, the new rate may be higher than the rate on your old card. 

If you worry it may take longer than the intro period to pay off your debt, consider transferring your balance to a debt consolidation loan. BHG offers fixed, affordable payments with terms up to 10 years.1,2 Plus, dedicated loan specialists provide a concierge loan experience, guiding you through the loan process. 

 

 

Balance transfer vs personal loan chart


Source: Bankrate, Investopedia - Accessed on 3/14/25
1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

 

How to pay off credit card debt FAQ

 

Should I pay off my credit card debt or save first?

It usually makes sense to pay off your debts before saving money, especially if you have high-interest debt. This is because the high interest rates on your accounts will often cost more than the money you can save. For this reason, any money you can afford to save is better allocated to paying off your high-interest debt so that it doesn’t continue to compound. 

 

How can negotiating with creditors reduce my debt?

If card issuers are willing to consider negotiating your credit card debt, you may be able to set up a payment plan, pay off the cards for less than what you owe, or agree to a forbearance. However, there are definite drawbacks to negotiation, as these solutions negatively impact your credit score.

 

Can I pay off credit card debt without hurting my credit score?

Absolutely! Any moves you make to pay your monthly balances on time can help build a solid payment history and, in turn, improve your credit score. Plus, reducing your credit card balances will lower your credit utilization ratio.

 

Are debt relief programs worth it?

Debt relief (debt settlement) programs offered by for-profit companies should be viewed as a last resort, and only after you’ve exhausted options for consolidation. Debt relief companies can fast-track getting out of debt, but they often charge high upfront fees, and the process could hurt your credit score. Watch for scams and make sure you understand the potential fees before handing over your finances to a debt relief company.

 

What if I can't afford minimum payments?

Many creditors are willing to work with you if you cannot afford to pay the monthly minimum payment. Call the company as soon as possible to see what you can work out. If getting a debt consolidation loan isn’t an option for securing a lower minimum payment, you can contact a credit counseling agency, which will help you organize a debt management plan to pay down your debts. Debt relief programs could be considered as a last resort, as they come with drawbacks and can charge exorbitant upfront fees.

 

How BHG can help you pay off debt faster

At BHG Financial, we believe financing should fit seamlessly into your life and goals. That’s why we offer personal loans tailored to your needs, with amounts up to $200,0001 and flexible terms of up to 10 years.1,2 Consolidate your high-interest debt with a BHG loan designed to help you move forward confidently. 
 
Plus, you’ll enjoy dedicated, U.S.-based concierge service that works around your schedule—because your time is valuable. Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan estimate in just seconds.